Apple: we could settle patent fights if others would “invent their own stuff”

Apple announced a record second fiscal quarter on Tuesday, but had some extra …

Apple largely impressed investors on Tuesday by announcing a record second-quarter performance that nearly doubled its year-over-year earnings. The company posted quarterly revenues of $39.2 billion and a net profit of $11.6 billion in a quarter that typically sags after the holiday season, citing "fabulous" levels of success globally with both the iPhone and iPad and better-than-market growth when it came to Mac sales. But in addition to the numbers, Apple CEO Tim Cook offered some strong words on the company's position regarding lawsuit settlements and discussed the possibility of merging the iPad with the MacBook Air—two hot topics among the analysts on the call.

During the second quarter, Apple sold 35.1 million iPhones (up 88 percent year over year) and 11.8 million iPads (up 151 percent year over year). Apple also sold 4 million Macs (up 7 percent from a year ago) and 7.7 million iPods (down 15 percent). Apple said during its conference call that its iPod sales were still higher than expected and the iPod touch made up more than half of the iPods sold. The company also said that it has sold a cumulative total of 67 million iPads since its launch almost exactly two years ago. "It took us five years to sell that many iPods and three years to sell that many iPhones," Cook said on the call.

One of the most talked-about topics from the call was centered on product convergence and whether Apple would want to mimic the PC market by trying to mash an iPad and a MacBook Air into a single product. "Anything can be forced to converge, but the problem is that those products are about tradeoffs, and you begin to make tradeoffs to the point where what you have left doesn't please anyone," Cook said. "You can merge a toaster and a refrigerator but those things aren't going to be pleasing to the user. To make a compromise in convergence—we're not going to that party."

The company also shed some more light on its efforts in China by pointing out that revenue was at a record $7.9 billion there during the quarter, up more than three times year over year. Revenue in China for the first half of 2012 was $12.4 billion compared to $13.3 billion for all of fiscal 2011, so things are obviously looking strong. Cook also pointed out that China has yet to even get the new iPad, and that the iPhone 4S saw a wildly successful launch there in January.

Finally, one analyst dared ask a question about Apple's litigation battles when it comes to patents. "I've always hated litigation and I continue to hate it," Cook said, but "we just want people to invent their own stuff." Cook went on to say that the company is open to the possibility of settling with the likes of Samsung, Motorola, et al "if we could get to some kind of arrangement where we'd be assured [they are inventing their own products] and get a fair settlement on the stuff that's occurred," but emphasized that such a thing would only happen as long as "Apple does not become the developer for the world."